one in which we did hear from the former lehman brothers ceo dick fuld for the very first time since the financial crisis. talked about his early days at lehman but did not and frankly would not address those last days at lehman brothers. that's all for us. "power lunch" picks the ball up now. >> halftime is over. the second half of your trading day begins now. >> scott, thank you very much. welcome, everybody. along with mannedy drury, i'm tyler mathisen. a new way to fight cancer and new ways to invest in cancer therapies. >> news is breaking ahead of the big cancer fighting conference this weekend known as asco. also jamie dimon accusing shareholders of being lazy. is he right? and if you had to pick just one to fund which would you choose, the 401(k) or your 529 college funneled. today hard evidence of which is the right choice.

but we begin with the war on conference. the research conference. novartis stock is up about 12% this year. but what exactly is this new treatment? what does it mean for those with cancer? meg terrell got an exclusive tour of the manufacturing plant. meg, run us through. >> mandy, that's right. it sounds a little like science fiction but it's close to becoming a reality. all you need to know is it's a form of immune owe therapy helping your own immune system fight cancer. it will help patients with leukemia that stop responding to other treatments. it takes a patient's t cells out of their body manipulating them in the lab so they better attack cancer and re-infusing them. this requires a whole new way of manufacturing because each patient gets a personalized treatment. we visited the new plant in morris plains new jersey to

see how it works. they have a system of tracking a patient's cells all the way from the hospital where they're being treated to the plant. similar to air traffic control. they even track the flights that transport the cells. they arrive packed in dry ice before being sorted to isolate the right cells for the procedure, engineered into super cells and multiplied so they pack a more powerful punch when they returning to the patient. when we went into the labs we had to get suited up in several layers of protective gear not for our protection but for the cells. they think of each set of cells as an extension of the patient they're treating. they're monitored 24 hours a day. we talked with david epstein about the potential of car-t. take a listen. >> most of these patients have pediatric acute lymphocytic cancer. they may have failed other therapies. these are very very sick

children who have no alternative. and this therapy gives them a chance of having a normal life again. >> they still have to go through rigorous safety and efficacy testing but if all goes well we could see the first products on the market in 2017. we'll give you a rundown of who's competing in the next hour. >> thank you very much for that, meg. certainly good news indeed for those touched by cancer. we have a news alert now from washington. with more swiss banks settling with the department of justice. eamon javers has it live. >> reporter: that's right. it's another turn of the crank against swiss bank. the department of justice saying it has reached resolutions with four swiss banks here. those will enter the department's swiss bank program in which it's all about disclosure here. they're going to have to cooperate with doj investigations as to which americans had secret swiss bank accounts. they'll have to reveal a lot of information about those accounts. the one bank that most americans will recognize is private

banking out of lugano. the doj saying that bank had and managed 109 u.s.-related accounts and they say that they had a peak value of assets under management of about $139.6 million. under this deal that's just been announced, they will pay a penalty of $1.363 million. >> thank you very much. a news alert now in the bond market with seven-year notes up for auction. rick santelli tracking all the action at the cme. what is today's grade, professor santelli? the best of all three by far, a minus on 29 million seven-year notes which at dutch auction yielded 1.888. so if 8 is a lucky number for chinese, it's really lucky, i guess, if you bought into this auction. it gives us a good indication that many investors at least believe that maybe we've turned the corner on some of the selling pressures. it is the longest auction instrument on the curve this

week. the total supply was 90 million. the bid to cover $2.49 was above 10 auction average as was 3.58. directs were pretty close to 10 option average. no matter how you sliced it, this auction opens the door up to see how it all settles out tomorrow. let's see the winners and losers at the previous auction levels. mandy, back to you. >> best of breed so far this week. thank you very much rick santelli. let's look how the benchmark 10-year note is performing. the 10-year is yielding 2.13%, a little lower than where we were sitting yesterday which was 2.15 and the 30-year is yielding 2.885%. shares of broadcom moving lower by news it's being bought for $37 billion. the semi conductor sector is higher but it's under pressure now. bertha coombs is covering the story for us at nasdaq. >> reporter: still outperforming the market. come walk the wall with me here

at nasdaq. we've got the semi conductor index pretty much flat. there you go starting to be a little positive and that's really all you see in techland that is positive our chip names, because this is a record deal in terms of size. $37 billion. analysts are very positive on the deal for broadcom. they say avago is very good at rolling up these companies. they are just completing this month their roll-up of emulex and its storage products. this is going to be a deal although we are watching broadcom fall today. do know that broadcom did rise yesterday on reporting about the deal ahead of the announcement. overall we have seen a number of these companies' stocks moving higher because there's been a lot of talk about consolidation in the chip space. and analyst shaw says we'll harry even more of it. >> the backdrop today is favorable for continued m & a.

you don't have a lot of in market growth, interest rates are low and companies who are making acquisitions are getting rewarded up front by the market. >> avago had been in talks, some had said on free scale though it was outbid by nxp. intel is among others shopping for other chip makers so there's certainly going to be more headlines ahead, no doubt. back to you. to the health now of the american housing market. contracts to buy previously occupied homes soaring to a nine-year high. pending home sales rising almost 3.5% last month. that's the fourth straight monthly increase. sales are up 14% from a year ago, the largest year-on-year rise since september of 2012. so where are they rising? contracts surged 10% in the increase and increased 5% in the midwest. the south seeing a 2% gain and

just 0.1 of a percent higher out west. mandy. >> thank you. here are the headlines, costco beating earnings estimates, however revenue and comparable store sales were below forecasts. it was hurt by lower gasoline prices and also a stronger dollar. elsewhere, chipotle raised to a buy which noted the stock's nearly 20% drop over the past month along with its forecast of at least 25% growth through 2016. and israel's teva pharmaceuticals disclosing a 1.35% stake in mylan. you might recall mylan rejected the offer calling it grossly undervalued. tomorrow is may 29th. 5-29 that's college savings day. the big dilemma many parents wrestle with is should you fund your 401(k) for your retirement or your child's 529 plan. our senior personal finance correspondent, sharon epperson is here with his answers. i think i know the answer.

>> you know the answer but some parents admit they plan to dip into the 401(k) and ira money and delay their own retirement to pay for their kid's education. it's a better alternative because who wants their kid to be saddled with a huge amount of debt. but there are ways to save for college and retirement at the same time so that you don't jeopardize your own financial security. here's a good way to strike a balance and prioritize your savings. the first dollars should go to your 401(k). do that up to the employer match. you want the tax savings. you also don't want to miss out on free money. if you don't have a 401(k) contributing to another type of retirement plan like a roth ira. the key is to earmark at least 10% to 15% of your pay. that's the first step that you put that toward retirement. then pay down credit card debt other high interest debt. if you're paying over 13% interest on the average credit card, that's much higher than student loan rates if you end up having to borrow to cover your kids' college builds.

you also want to build up your emergency fund to cover six months of living expenses. you don't want to have to raid your retirement savings or college fund to pay for unexpected expenses. now is the time to start saving for college. open a 529 college savings plan. put that money in after taxes, it grows tax-free. you can take it out tax-free for qualified higher education expenses. if you enroll in your state's plan you'll probably get a state tax deduction too. the key is to save what you can and not worry if you can't save enough to cover the entire cost of college. the point is you can always borrow for college and your child can too but you cannot borrow for your retirement. >> thank you very much. maengd mandy, over to you. well, he became the face of the 2008 financial crisis after the collapse of lehman brothers. dick fuld now breaking his silence. in fact he just gave his first public speech since 2008 just moments ago in new york. our kate kelly is there and she has the highlights for us. also this guy is never afraid of sounding off.

jpmorgan ceo jamie dimon calling out investors saying they're lazy. what is behind that? and is he right? we'll debate. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. don't just visit new york. visit tripadvisor new york. with millions of reviews and the best hotel prices... book your next trip at tripadvisor.com today.

welcome back to "power lunch." gopro introducing a six camera

device. sharsz shares are down 10% this year but up 6% in just one week. google is set to put a buy button. they're also launching android pay. sirius xm facing a class action lawsuit involving royalties for songs recorded before 1972. the stock is up 16% in a year. ty. >> all right, mandy, more on fifa and the scandal. the president of the european football governing body michelle platinni not making any comment as he arrived for a meeting in zurich today. the meeting taking place ahead of the fifa congress which has been rocked by the arrests of leading officials in a major corruption scandal. tomorrow fifa delegates will vote in the presidential contest between the incumbent, sepp blatter, not indicted and a jordanian prince. blatter is running for a fifth

term. uefa is backing get prince and calling for the fifa election to be postponed. we shall see. a scheme duping more than 300 investors out of millions. many lost their life savings. here is andrea day with crime & punishment. >> the woman behind it had a legitimate tax and accounting business with hundreds of clients who trusted her. but when the funds she supposedly invested didn't add up, the feds bend undercover. >> try to get as close as we can to our people. >> she turned on the southern charm and promised investors the world. >> no one has ever lost any money through an annuity investment, ever. you're not going to lose a penny of it. >> approximately $40 million was brought in. >> reporter: but most of that money, according to prosecutors, was funding a lavish life. frank dale u.s. attorney in tennessee. >> she was telling people it was an investment they could not

lose money. >> reporter: joyce allen sold annuity investments through benchmark capital owned by this man. >> the reality was it was not an investment at all. >> reporter: he says benchmark also offered a home equity program and allen convinced her clients to invest in that too. >> we refinance your property and put you in a program. we end up paying the payments for you. >> reporter: she would prepare falsified documents, falsified asset letter to help these individuals qualify for loans they otherwise could not have obtained. and then the money from their homes was sent to benchmark. >> in turn he says benchmark paid allen a commission. dale says some investors got dividends and payments but it was all just an illusion. >> the business purpose of benchmark was to run a scam. >> reporter: they also created a website for investors to check balances online but it was all fake. >> they had no money in actual accounts. it was all money sitting in benchmark. >> reporter: with millions rolling in he said allen and

candler started spending. the two taking so-called business trips to vegas and palm beach. >> there was no business discussed. they were purely lavish vacations. >> reporter: the plan worked until one investor died and his family couldn't collect the money. they filed a lawsuit. >> it laid out how this was a fraudulent investment and nothing but a financial fraud. >> reporter: that suit prompted a state and s.e.c. investigation. >> allen kept on meeting with clients, taking their money, assuring them that their investments were perfectly safe. >> this is where i have all my money. this is where my husband has his money. >> the reality was she did not have her money with benchmark. >> he got in his car, dressed in a suit and ended his life. >> reporter: he died. just hours after his death allen scrambled to get the cash. >> she was trying to raid the account of the funds.

>> after trial, allen was sentenced to 30 years in federal lockup. she was convicted of wire fraud, money laundering and more. five others were also charged in the scheme and all pleaded guilty. back to you. >> andrea day with crime & punishment. well, he is never shy about saying what is on his mind. jpmorgan ceo jamie dimon accusing shareholders for being lazy for relying on advisory firms when it comes to voting. is he right? and he became the face of the financial crisis after the collapse of lehman brothers. dick fuld breaking his silence. you do have to stick around for this, next. s. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out

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the 328 horsepower q50 from infiniti. let's take a look at gold prices. they're sitting at 1188. yesterday we were at a two-week low of 1183 so we're five bucks above that but still gold has not done a whole lot so far this year. silver, palladium are moving higher. let's get a check on the bond market on the back of that 7-year auction that rick santelli gave a grade of a minus. >> i think all the markets agreed with that score keeping, that grade. look at an intraday of 7. if i would have showed you 5s, 10s or 30s, they also made new session low yields high prices after that auction. speaking of 10s, let's do a chart starting in march.

you can see it's slowly rolling over. with tomorrow revisions for first quarter gdp expected to go way negative traders seem to be getting long in anticipation. the dollar index also moved lower on what was a good auction and that somewhat makes sense on the lower yield move. tyler, back to you. >> rick thank you very much. he is always outspoken. jpmorgan ceo jamie dimon slamming shareholders calling them lazy for relying too much on advisor refirms on issues such as his pay, rather than making their own decisions. is he right? plus china's stock market crashing overnight, tanking 6.5%. the market there has doubled over the past year. is it a bubble still opportunities, is the bubble over? can you make money in china? plus -- >> today's powerhouse is home to three fortune 500 companies. actress halle berry was born here. and it's home to the rock 'n'

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here's your cnbc news update for this hour i'm sharon epperson. embattled fifa president sepp blatter speaking in zurich. he says the corruption scandal surrounding the world soccer body has brought shame and humiliation and demands change. he expects to be re-elected president for a fifth term. the u.s. military releasing new video of air strikes against isis targets in syria. the two strikes occurred may 18th. the first video shows an armored vehicle being destroyed. the second shows an isis fighting position targeted and destroyed. the deadly heat wave in india continues. more than 1400 people have died from the searing heat in the past month as temperatures reached 120 degrees. the heat wave is expected to last several more days. a new study says women who stick to a mediterranean style diet may significantly lower their risk of uterine cancer. this after italian researchers measured how closely a group of 5,000 women stuck to it.

the diet includes a lot of fish vegetables and grains. and that's cnbc's news update for this hour. back to you. >> thank you very much sharon. stocks trading lower today as greek debt worries and a sell-off in shanghai dampen investor sentiment. the major indexes are off about a half percent for the dow industrials and s&p 500. there you go. the transports though moving decidedly lower at one point down as much as 1.2%. now down 1.3%. a few bright spots for the dow, home depot, nike exxon. nike has just turned negative and home depot running on the flat line. the qqq, let's take a look at it, down about one-third of 1%. from the nasdaq automaker tesla, nxp semi conductor and western digital are higher but nxp has dipped lower by a half percent.

let's look more into this. robert, you're actually quite positive on the u.s. market at this stage and i see you've got a target for the s&p of 2470 in 12 months about 17% upside from here. what makes you so bullish? >> well we think the backdrop for this market is clearly positive. you know you continue to have low interest rates. the central banks, although they will be turning a little less positive down the road here they're still very constructive today. we think the capital spending cycle can improve and valuations of the market aren't really negative today. there's an old adage that bull markets are born on pessimism, mature on opt sichlimism and die on sts. so we're not at statistics yet. we're starting to see better numbers out of the economy but i would expect six, nine months maybe 12 months from now much stronger statistics and that will drive valuations to that 19 level i'm talking about and that gets you to 2470. so i'm constructive and i think

investors need to recognize this is a bull market and you can't ignore it. >> mike do you want to agree with robert or counter anything he said? >> well i'd like to counter a little bit for the 2015 year. i really think 2015 is going to be a flattish year. i think that's from a combination of really slow earnings growth and also a combination that i think valuations are a little bit on the rich side right now. not excessive but on the rich side. you couple those together and i'm looking for a flattish 0 to 5% year this year. but i agree that as we look out to 2016 i think earnings growth reaccelerate again and it could be low double-digit earnings growth. with that i think stocks look cheap again and over the next three to five years, stocks look a lot better than bonds do right now. >> mike so if you think this is going to be a flattish year and you're going to ride it out until better returns in 2016 would you be looking to put your money elsewhere? we certainly saw overnight the

big risks that are inherent with a market like china, right? obviously it's had the incredible gains, up 50% or so this year and then boom it has a massive drop overnight. >> yeah i think you can selectively invest in the u.s. i think europe is offering a good opportunity. i would be a little wary of the u.s. because, you know qe is over and yellen has told us that she's going to raise the fed funds rate this year. we believe her. so i would wait for that 5% to 10% correction. we just started the summer. it's going to last three to four months now. i believe in that time period we're going to get this correction that everyone has been waiting for. it's not going to be big, but i would look then to really invest. >> for more on how to invest on emerging markets, go to power lunch.cnbc.com. sara eisen for a market flash, i checked and she's here. >> i am here watching united rentals hitting session lows right now. it's off over 9%. that's why we're keeping an eye on it. it's also the worst performer in the s&p 500 right now. it's a rental equipment company

and it presented at the key bank capital conference this morning. united rentals may have made some pretty downbeat comments at the conference when it comes to its may activity. year to date the stock is down almost 7%. back to you. >> thanks very much sara. let's go to sharon with breaking news. sharon. >> we are following a dow jones report at this hour where jpmorgan is now announcing that it's laying off 5,000 employees by next year. they're expected to layoff this many employees by next year and they could lose thousands of tellers within the last -- in the next two years. they're saying that overall the head count has already fallen about 20,000 from the 2012 peak but keep in mind that the layoffs that they are expected to have by next year the 5,000 layoffs will not necessarily mean that the overall head count will be reduced because they hire about 40,000 employees every year to fill open positions. they haven't talked about these layoffs previously but they have hinted that they are looking at ways to cut expenses and so we'll bring you more

details as they become available, tyler. >> all right, sharon epperson thank you very much. he became the face of the financial crisis or certainly one of the most prominent ones. former lehman brothers ceo dick fuld now breaking his silence for the first time since the lehman collapse back in 2008. cnbc got exclusive access to his remarks today. let's get to kate kelly in new york city. what did he say, kate? >> reporter: hey tyler, i'm just walking out of a pretty tense speech in which fuld talked a little bit about his experiences with the failure of lehman brothers, which of course filed for bankruptcy in 2008. he eluded some questions about what exactly happened but he did say he made some mistakes. he talked, for example, about missing the violence that was his word in the markets. he talked about overlooking how strong the contagion was as the damage spread from one asset class to another. he also said something to the effect of did we fall prey to other agendas, i'll leave it at all, but implying that lehman had. he went on to talk about the economy now because he's now

advising very small companies on m & a and other strategic decisions. he talked actually about income inequality. he said the wealthy are getting wealthier. the belly of america is getting hurt. we don't have almost any inflation except for food and other key consumer goods, so he's obviously somewhat concerned about the state of things. let's take a listen to him in his own words. >> oil is down 50%, that's great. that helps on inflation. there is no inflation at all. except except for food and some of the key consumer goods that people need. outside of that inflation is great. but you take that coupled with flat to down wages, that's creating a huge amount of pain in this country. so again, when i talk about the belly of america, that's why they're getting hurt. so the big question is how do

corporations grow earnings. a lot of them have been increasing earnings by decreasing their expenses. but you can't continue to eat yourself to death. you just can't continue to fire people. eventually it cuts into productivity and how you want to grow your platform for new businesses. clearly a push for revenues but again with 70% of the gdp coming from the consumer, not a lot of room there. so you're seeing a lot of these m & a deals where, okay i buy your company, i cut your expenses, fire a bunch of your people, exempt for the key ones that i need and i hope to hold on to 60 some odd percent of your revenues. so at the end of the day, i know we're seeing a number of roll-ups in energy and construction and some of the

smaller banks. but again, it's going to be the same. hold on to the revenues and fire people. okay. those are the easy issues. those are the easy issues. there's some other ones that i call the black clouds. you cannot ignore the minus 1% first quarter gdp. i know we're talking about 2.5 plus for the second. i hear all the reasons why minus 1 is a big smack. deflation deflation, huge concern. versus the need to increase rates. rates will go up increase the cost of capital, what happens. the spread for a lot of these companies has already been squeezed. i'm concerned about that.

low wages, as i talked about before. and then the income gap, income inequality. i know you don't want to hear this from me but the wealthy are getting wealthier. and again, the belly of america is getting hurt. why do i talk about this? look i'm a hard core capitalist, let's be fair. capitalism only works, though if it starts on the top and filters down. if it doesn't get down we're going to lose. really simple. the other part what happens when we come off zero on rates? we've never been at zero so how do we know? and i don't know. but the real question is can we ever really increase rates at this point. internationally, huge amount of global debt issuance whether it's greece ecb, all the

quantitative easing to build these economies. again, even look back at the u.s. huge amount of debt issuance which i spoke about before. but where's that debt going? they're raising debt. run this one by me. and buying back stock. at some point that's going to hit us. the euro is in jeopardy. i talk about greece. somebody has to pay or they're going to default. number of regime changes in the middle east in the last six years. isis. isis believes in the apocalypse of everything that we believe in. but the real question is can they get enough territory to create and form a state. china. when china had a 15% gdp, they reported 12. now they have got 7 and they're coming around at 5 and probably even less.

they have a huge issue. but a bigger issue for us is what's happening in the south china sea as they're grabbing territory and grabbing resources. that's going to be an issue for the u.s. putin, desperate to regain his dominance. iran nuclear capability. none of these are any individual surprise but taken together they're fraying the fabric of our system. now maybe all this gets changed with new leadership. i don't want to get into a political diser takes, but we need new leadership. >> all right, that's dick fuld. we're joined by andrew ross sorkin, kate kelly and mandy to discuss a little more about his remarks. andrew, that was fuld as economic geopolitical commentator. does he have credibility to do that? >> that's a good question. i thought he was thoughtful in everything he said. i don't think he said anything that was particularly

necessarily new, but he framed it up and it was articulate about those issues. i think that most people who are watching our air today are watching or were watching in hopes that they were going to hear more from him specifically on lehman brothers the failure of lehman brothers and how he thought about his role and the government, et cetera. he seemed to hint at it. kate will be able to speak to that better than i can because we missed a little bit of that in between in terms of the video. but, you know he clearly at 69 years old is trying to move on. he seems to be doing it. >> yeah he said so much i want to say on lehman sort of dot dot dot. we were kind of left hanging there a little bit kate. what more do you think we wanted to hear? what do we need to hear? >> mandy, i think people want to know if he feels any remorse and acknowledges mistakes. he did acknowledge mistakes and i talked about the violence in the market the contagion from one asset class to another. he talked about the need for

liquidity in today's markets and said words to the effect of been there, done that. he acknowledged he had done some things wrong but spent much more of his time talking about how he and his team built lehman brothers into the powerhouse that he believes it was. i think a couple of times he even spoke in the present tense as if he still works there. he said, and this is apparent from what i'm telling you, he has not been able to let this go. not a day goes by that he doesn't think about lehman brothers. he'd love to have moved on but it's not the case. so it certainly was the elephant in the room even if he wasn't as direct about it as we would have liked. >> what's fuld doing now, andrew, and how is he doing financially, is he devastated or not? >> no he's not devastated. devastated is a relative term. >> right. >> we should note at one point he had $1 billion of stock in his company when he rode all the way down to $56,000. he does have tens if not maybe more than $100 million and he owns some homes and other things.

he's got a small boutique firm if you will that's getting into all sorts of different businesses. real estate he's done an insurance deal so he's trying to move on. i don't think he necessarily wants to become or expects that he's going to be the ceo of another large bank but i think he's trying to move on with his life and maybe this is the first step in him trying to put that behind him from a public perspective. >> all right, andrew, thank you very much. andrew ross sorkin and kate kelly reporting. well breaking news. moments ago jpmorgan says it will layoff 5,000 employees pie next year. big move from the bank and ceo jamie dimon who is lashing out at shareholders, calling them lazy, because they rely too much on advisory firms. god knows how any of you can place your vote based on iss or glass lewis, the advisory firms. if you do that you are just irresponsible.

i'm sorry, and you probably aren't a very good investors either. and you do believe me i know some of you here do it because you're lazy. reaction now from bob mccormick who oversees proxy voting guidelines for glass lewis and also with us is dan laden with compensation advisory partners. well, how do you feel about that, bob? >> well i would say it's a bit of an outdated perspective. having been doing proxy voting for about 20 years prior to glass lewis for ten years, there's a significant amount of time resources and energy devoted to making proxy voting decisions. 20 years ago there was a bit more outsourcing. if you look at the largest mutual funds and pension plans, they often use several providers, us iss, providers to help make their decision. so i think that perspective that our clients are -- >> they're lazy they're bad

investors is what he said. he said they're lazy they're bad investors is what he said. you used to do proxy research as i understand it for fidelity, right? >> yeah we made our own decisions and we engaged with companies. we had several research providers. so i think that perspective is -- is really outdated. that doesn't really happen any longer. >> so dan, you know let me get your thought on this. should a guy who got a raise in a year in which his company paid $20 billion in fines, should a guy whose bank last week pleaded guilty to felony charges and is now part of a $5 billion payment with other banks, i should point out, in connection with currency manipulation should he be talking or should he just be quiet? >> well i'm not going to make an assessment on whether he should be speaking at all. >> why not? why not, man? come on. >> i think it's a harsh term to call institutional investors

lazy. i think a fairer term would have been resource constrained. the vast majority of u.s. companies file their proxies within a six-week period. larger institutions have a fair amount of resources to evaluate those proxies. smaller institutions don't and they do rely heavily on the isss, glass lewises of the world to provide them with the insights to make their decision although he has a fair point that every company is very different and institution investors really have an obligation to make an assessment on their own of the various voting criteria. >> bob, don't you think that, speaking from glass lewis, that you would look at each individual proxy issue, recognizing that all companies are different and that the issues may be different from one company to the next? that's what you do right? >> absolutely. yeah, particularly compensation. we look at two points quantitative and qualitative. what's happening in the company, has there been a change in strategy, new ceos, et cetera.

it's imperative to look at each individual situation. while it may be true that some investors look to the recommendations as a guide for a smaller company with which they're less familiar everyone is familiar with jpmorgan. everyone will be making their decisions based on the specifics of that company when they look at that company. so the theory that there's more reliance is a pretty weak argument. for a smaller company, maybe you're an indexer, maybe you tend to follow a recommendation. but a large company, there's so much data and so much engagement, you really are armed with that information and that's really where most of our clients come out. >> we leave it there, thank you very much. we'll be right back in two minutes. ity got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions

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time for our weekly visit to the powerhouse, home to the rock 'n' roll hall of fame. the eastern conference nba champions we're talking about here cleveland, ohio.

with us is michelle anderson a progressive urban real estate. michelle welcome. good to see you again. let's check out some market stats for cleveland. the median sale price a very affordable $130,000. they have got 9200 properties on the market and they stay on the market for an average of 97 days. first listing is 4525 wichita avenue listed for about $83,000. taxes -- now, michelle this is insane. $620 annually? three bedrooms one bath 1240 square feet of living space. that's like a day's property tax for me in new jersey michelle. >> it's pretty amazing. the taxes are very reasonable in the city of cleveland. >> tell us about this house. >> this is a wonderful affordable adorable starter home. everything is in tiptop shape. it has hardwood floors natural woodwork, very charming home.

it even has granite countertops in the kitchen. move-in ready. cheaper than rent. >> and it is move-in ready. there's nobody moving there right now. let's go to the second listing, 1578 northland listed for $209,000. taxes just over $5,000 annually. three beds two baths, 1700 square feet of living space. this is another affordable home. a compact one, though i would say. >> it's actually a very spacious layout. it's very open. it has a wonderful huge master bedroom suite that takes up the entire second floor. beautiful ceramic tile bath a nice closet walk-in closet with the organizers. first floor also very open. very nice granite countertops in the kitchen. stainless steel appliances. it is just just a lovely house. >> it looked beautiful on the inside. how far is it from downtown? >> probably a 10 15-minute

drive from downtown cleveland. we have an easy commute in the city of cleveland and this is in the city of lakewood very very popular area. >> okay. let's go to our powerhouse of the week which is 1225 west 67th listed for $374,000. taxes and fees of $1500. mandy, this is making me ill. $1500 annually. two beds two and a half baths, 2100 square feet of living space. it looks like a condo or a townhouse. >> this is a townhouse. it's a four-level townhouse built in 2005. very open contemporary main living area with nice granite countertops in the kitchen, a gas fireplace. there is outdoor living space with balconies and yard on all four living areas. there is a wonderful rooftop deck. the entire roof is a deck with amazing views of downtown cleveland skyline, the lake and

the marina. you can't beat this house. and it's in a great location. >> michelle thank you very much. i appreciate it. good luck to the cavaliers, though i'm not picking sides here. good luck to them. i know everybody is excited there. lebron did what he came to do. >> he sure did. he really came through for us. we really appreciate that. >> all right michelle. take it easy. mandy. >> i was just thinking what can you get for $82,900 in new york city, ty? a phone booth maybe? a bathroom if you're lucky. let's take a look at today's celebrity powerhouse. j. lo's los angeles hidden hills home is listed for sale at $17 million. the private home sits on three acres, includes nine bedrooms 13 bathrooms, a pool spa and an entertainment complete with a 20-seat movie theater. why you would need 13 bathrooms, tyler, i really don't know. anyway, cute cute cute. >> you really have to go. all right, qqq tracks the

nasdaq. it's up 22% over the last year. is there room to grow? also gopro announcing some new initiatives they hope will take them to the skies. more "power lunch" in two minutes time. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on

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here are this hour's power points. four more swiss banks are striking a deal with the u.s. department of justice. former lehman ceo dick fuld breaking his silence on the collapse of his firm. and jpmorgan ceo jamie dimon calls shareholders lazy for relying too much on advisory firms. if you missed any of the big stories visit powerlunch.cnbc.com. take a look at this stunning video from wimberley, texas. the perez family were upstairs when a wall of water ripped through the front door took it off its frame, flooded the living room. the nearby blanco river overflowing its banks and turning their living room into a whirlpool of flood, mud and water. luckily firefighters were in the area and they did manage to rescue the family unharmed. terrifying. with the drought still in full force in california where

they need rain a controversial question is starting to emerge. why is water so cheap? that's next. it's part adrenaline and part adventure. it's part geek and part chic. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz.

the terrible drought out in california, but the water is

cheap. jane wells is live in oroville california. jane. >> reporter: tyler in this epic drought, this reservoir has more than enough water needed for the residents that use it that's why they're pitching themselves as an oasis for business with the cheapest water in the nation. how can that be? well, long ago the water agency built this reservoir upstream and they're basically first in line for water. >> it has to go through us to get anywhere else. >> reporter: mike glaze runs south water and power an guess how much his customers pay for one unit of this pristine water, which is 748 gallons? 42 cents. it would be a dollar still cheap, except the cost is offset by the power his agency sells on the wholesale market from the hydroelectric plant powderered by the water. depending on where you live around here it's a good deal.

>> i think we're very fortunate to live in this part of the state. >> how much do you pay for water? >> it's about $22 a month. and i have three teenagers and then my husband and i and we also raise 4-h animals. >> our reservoirs were built for our purposes independently. we're not obligated to state water contractors or any one down the stream. if we didn't have another drop for ten years, we'd still have enough water to supply our customers. >> reporter: now, the state is mandating that they cut water usage 36%. but listen to this, all the water they save will only stay in this reservoir for their own customers, it's not going anywhere else guys. back to you. >> thank you very much jane wells out in beautiful california. >> and that will do it for the first hour. we toss it over to brian. >> all right, mandy and tyler, thank you very much. it is 2:00 on wall street noon tulsa time. the dow is down 63 points and you are watching the second how were of "power lunch." howdy, everyone i'm brian sullivan. melissa is at the nasdaq where we have pulled back a bit from

that record high yesterday. >> it was a record closing high and the pull back isn't so bad. the nasdaq is trading in a 26-point range all day. right now down about 0.3 of a percent. the semi conductors really trying to stay in the green. the stocks hitting a new high in today's investigation. this is the avago/broadcom deal. also cyber security names as better than expected earnings last night and here's another bright spot. twitter. the ceo asked two times at the recode conference if he expects to still be ceo by year's end. he dodged those questions. we see the stock up 1.3%. speaking of the nasdaq pretty much everybody knows that apple and netflix have been big standouts over the past year. at least they get much of the attention. but did you know that there are five nondeal-related stocks i.e. ones that have not been bought, that have done better than apple. four of those have also done better than netflix in the same time frame. here they are. monster beverage up 89% over 12

months, vertex pharma up 77%, regeneron and little o'reilly automotive up 52% over the past 12 months. apple up 47% over the past year. shoutout to springfield, missouri's o'reilly. on the flip side there have been some serious dogs at the nasdaq over the past 12 months. look at that wynn resorts. down 53%. mattel down 33%. barbie woes. and sandisk down 27%. how should you play the nasdaq now given all the stats and everything that's gone on? let's look at this through the qqq etf. doug mckay is bullish on the triple q. jimmy is making the bearish case. doug, i'll begin with you. the qqq has done well but i want to caution our viewers, if you're buying this -- excuse me i get all choked up talking about technology. if you're buying this because you think you're getting some

broad swath of tech think again, my friends. three stocks microsoft, apple and amazon represent 25% of the triple q. is it a good bet right now? >> i would be bullish on the qqqs. i actually invest in individual stocks, but as an index it's obviously a bet on innovation and the economy. bet particularly on biotech and technology stocks in particular. a couple of characteristics there is growth tech seems to be insensitive to the economy except in times of recession, which i don't think we're in. and two, valuations you just can't be precise with because no one can really tell what size of many of the new markets are within tech. bubbles you have to be careful of clearly, but valuations you have to be -- you put your art hat on rather than your science. >> you're making some good points that could actually doug, i think be used for the other side of it as well. for example, valuations.

looking at my screens this morning, i know trailing p.e.s are not as good as forward p.e.s, there are five names in the nasdaq 100 with a trailing p.e. of more than 100. so they're way up there in the stratosphere. biotech has been red hot. a lot of money seems to be going to just a few stocks. those things don't worry you? >> well that's the key point what you just said there, a few stocks. i was a tech fund manager in 2000 as i have had on prior shows. at that time every company was trading at 100 times earnings. cisco systems, seminole event, broadcom broadcom. both of those stocks are nowhere near the nasdaq 5,000 level highs because of valuations for every company was that 100 times. so individual companies always can be highly valued. and you have to allow for that because google when they went public was trading at an 80 times p.e. you have to have an allowance

for that. >> i want to go to the bear case because it sounds like against the overall markets just not technology and not just the qqqs. >> no. but i think it's a little bit more on the nasdaq because it represents risk. you talked about the p.e.s and you should never let the facts get involved with a good story and the nasdaq. people will buy the nasdaq when the all clear bell has sounded and risk comes into the market. the things i don't like about the nasdaq and the broader markets as well is the nasdaq made highs and couldn't keep it. none of the other two confirmed it and now it's traded a little weaker today. we saw a solid number today in pending home sales and how did stock markets react? they traded off a little bit. so it shows me that there's going to be some growing pains as we realize with the cpi number last week a little higher than expected a good pending home sales number today, that the fed probably will tighten itself. i don't think -- >> you're going to poke holes into the nasdaq's trading by saying it's pulled back a third of a percent after closing at record highs yesterday?

>> no i'll change and say here. here's what i'm going to poke holes in. it made record highs yesterday and didn't follow through. that's better. the finer point, it didn't follow through and i think it's poised to have a pull back and it wasn't joined by the other two coming into it. so i think that we've gone to the high end of the range and all three indexes. now we've got to go to the low end because there's nothing on the horizon to push us higher. if anything the fed tightening will cause a little nervousness. i hate to be the guy that starts talking about geopolitical risk but there is real geopolitical risk gaining steam in both russia and china. this thing in china is a big deal. don't roll your eyes i can feel you doing that melissa, but i think we can begin to worry about that. >> you know me too well. good discussion guys. check out gopro shares they're soaring following comments the ceo made at the code conference. take a listen to what he said. >> okay. gopro is making a quad copter. it's official. >> all right.

>> and you may think that i'm joking. no we thought it would be terrific here on recode to drop the news that we are officially developing a quad copter. >> yes, i know i just dragged that out of you. >> quad copter drone, call it what you want. let's get to josh lipton who's live with more on this story. josh. >> reporter: well, melissa, you know gopro bulls have wanted the camera company to diversify that product lineup. there you see the ceo, nick woodman, trying to do that. in fact woodman at this recode conference introduced two new products. one was that gopro drone and that will launch in the first half of next year. this is of course a red hot market. analysts at doherty and company think that drone could add nearly half a billion dollars more in revenue for the company next year. woodman also introduced a new six-camera spherical array and that will allow users to shoot content for virtual reality. woodman telling me he thinks that product could set up new

potential partnership between gopro and all those tech titans working in the virtual reality space from facebook to google. gopro has not yet released the prices of either product. you take a look at the stock of gopro, certainly still up strongly since that ipo last june, but down hard from its high, though investors as you point out, melissa, seem to be cheering the news today. beyond the new products what the investors in gopro also want to see is this company gain share in china. there is one concern there, which is local competition. the likes of a $64 action camera. i did ask woodman about that competition and he wasn't worried. >> the chinese consumer is like every other consumer where brand matters. and you've seen high-end luxury brands do extremely well in china. in the face of much lower-priced competition. competition that oftentimes seeks to just kind of knock off

what the premium brand is doing. and the chinese customer wants the authentic brand and they'll pay for it. >> reporter: now, gopro woodman tells me is off to a strong start in china. the camera is already offered in 300 stores there. thank you very much. speaking of china, a growing global story certainly revolving around that country. their market fell 6% overnight, but keep in mind it was after seven straight days of gains and an upward trajectory like it has not seen since 2007. but the list of worries around china is growing. the big four fears right now, what is the peoples bank of china going to do. also concern around margin investing. the ipo subscription period which could dilute the markets. you've got continued commodity price woes especially iron ore and then disturbing reports coming out that one of china's biggest companies whose founder was briefly china's richest man

is being investigated for potential fraud. that stock down 45% this month. let's bring in peter know vaur owe -- peter navarro. peter, when i read this story in the "washington post" last night and you follow-ups by the journal and others hong kong investigators are looking into literally the guy that was briefly china's richest man. what does this kind of thing do to confidence in a market where people were already starting to get a little bit nervous? >> it shakes it up brian. what we've got here is like w.c. fields meeting enron. you have a situation where the chairman of this company was massively short-selling his stock in anticipation of that plunge, number one. number two the enron part is it's basically two companies. you've got a private company that borrowed a bunch of money at high interest rates to create this enron illusion of

prosperity and growth. and they were able to book profits using their public subsidiary by booking sales at high margins and not accounting properly for the cost of goods sold. if you're in that stock, don't be waiting for it to go back up. >> and again, the stock right now is not trading and we're looking at it and people at home are saying who cares about this company, i've never heard of it. but the stock had gone up 20 fold in the matter of a year or two. the guy was the richest man in china. it was a growing company, got all this attention, and suddenly people are asking a question of whether or not the entire corporation was effectively fraudulent because, to your point, peter, one unit was selling back to another unit which would then loan money back to the first unit to sell back to that unit. >> there's no question it is fraudulent, i have no doubt about that. the big question you ask, brian, which i think is the right one, is how does that undermine confidence in the rest of the chinese market. and it does. we all know that that's a gambling casino and not a place

to intelligently speculate. so it's buyer beware and that's where you get w.c. fields back into the picture. >> i want to back up though because when reports of the collapse surfaced last week we did have a period where the chinese markets did rise consistently and pretty strongly over the past five sessions or so. peter, i'm curious from your viewpoint what is contributing to today's decline? because what we're seeing across the board, when you take a look at the etfs that people might have at home in their portfolios, they are down considerably and these are smaller etfs, pek but they are down very sharply. so what's behind this today? >> that's maybe the second part of the news that brian brought up, which is this announcement by the chinese banks to lower -- government to lower the bank reserve requirement a little bit in anticipation of a possible sell-off in the market. melissa, what's behind this thing is we've had like a rocket

run-up since the lows of last june fueled by a trillion of margin buying. if you look carefully at the chart on this yeah we have a massive run-up but in the last month or so it's been a sideways pattern. i think probably what happens here is you get a sharp correction back down to the march highs and there you go. i mean it's been going up basically on the last leg by basically margin trading and gambling. >> peter navarro, some strong views there. peter, thank you very much as always. appreciate it. well history does show that a sell-off like the one that we saw in china overnight often presents a big buying opportunity in one part of the american market. you want to find out which one? i'm sure you do. in order to do that you've got to go to our website, powerlunch.cnbc.com. let us set the table for the rest of the hour coming up. the cold hard truth about lies. why people do it and what you can do to protect your money against it. plus the boating indicator.

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at a brand new documentary airing tonight on cnbc explores the conditions that allow dishonesty to thrive and what we can do to reverse the trend. here's a sneak peek. >> we kind of anecdotally know that once you lie, you're more likely to lie again. probably the second lie will be bigger than the first. what we find in the brain is that at the beginning, if you lie a little bit, there's a huge response in regions involved in emotion, such as the amygdala. the tenth time you lie, even if you lie the same amount the response is not that high. after a while, the negative value of lying, the negative feeling is just not there so much. which kind of makes you just lie more and more and more. >> well joining us right now is the one you just saw there, associate professor of cognitive

neuroscience at university college london. you said a lot there, half of it was way too intelligent for my brain here but let's back it up a bit. why do people lie? >> usually because there's something for us to lie. people lie a little on their taxes to gain more money. people lie on online dating sites. men will add inches to their, women take a few years off their age to gain love. but i think what's more important is how we feel about that lie. if we feel bad, if it feels wrong, we're less likely to do it. if you can convince yourself there's a good reason for you to lie, if you think it's legitimate, then you're more likely to do it. >> and because we -- you know this is cnbc right? so we have encountered over the years many ceos who are seemingly caught in this sort of unvirtuous cycle of lying, you know financials. and eventually they all get found out. i'm sure you've talked to many people in this situation. do they explain how they do it? i thought next quarter i can make it up and they never do.

>> yeah, we convince ourselves for sure. >> that we can get out of it. >> we convince ourselves that we're not going to be caught. we convince ourselves we're not harming anyone. we convince ourselves that we're lying for the benefit of other people. for the benefit of the company, for the benefit of the employees. as i mentioned in the documentary, once we start lying, it's a slippery slope. because the first lie feels bad. the second one doesn't feel so bad. it's a bit like when you jump into the swimming pool and it's really cold. the first minute. after a while you get used to it. the temperature of the water didn't change but it feels okay to you so you continue swimming. >> how common is lying? >> well everyone lies. the question is what extent. so everyone tells, you know a little lie here and there. if you ask people have you lied in the last month or the last year, most people will say yes. >> if they say no that's a lie. >> exactly. but what's interesting is that still we see ourselves as honest people. the majority say that they're

more honest than the average person, which statistically is impossible. but we convince ourselves that our dishonesty is for good reason so we can maintain a positive self image. >> how can we tell that somebody is lying to us? and if somebody lies perpetually and habitually do they get better and better at hiding that lie? >> yeah. so that's the problem. it's really difficult to know if someone is lying or not. and the reason is that all the telltale signs of lying is based on the assumption that the person who's lying feels negative arousal, that they feel conflict, that they don't feel comfortable with it. now, if someone doesn't feel comfortable with it you may notice they're not looking in your eye, twitch a little bit. >> touch their face. >> they may take their time to answer you. >> adjust their tie, look away that kind of stuff. >> give you more details than seem necessary. but if someone is comfortable with their lie, then it's really hard to tell because they might

see it as a truth. take psychopaths for example. >> i was going to say doesn't that make them a psychopath? >> it's interesting because what you see with psychopaths is you can't -- there's no emotional arousal signal in their brain when they lie, and there's a small part of our brain -- >> so there's actually a chemical truth to the fact that there are some people who can lie, no matter how severe and have it make no chemical change in their head? in other words, they either completely believe what they're saying is accurate or don't give a you know what? >> well if they don't feel bad about it or really believe it as a truth, then there's less of a reaction. less biological reaction less reaction in the brain. >> interesting stuff. we'll look forward to seeing more of it tonight. >> thank you so much. >> be sure to catch "dishonesty, the truth about lies" tonight at 10:00 p.m. here on cnbc. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus.

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welcome back. let's get to street talk. analysts recommendations of stocks you need to know p. first up western digital. goldman sachs giving it a big upgrade. the target goes to 122. about 28% upside. analyst seize three key drivers. weak pc demands, shift toward enterprise bolstering long-term

profit trajectory and three, substantial increases in capital allocation. it may be a tailwind. check out stx, that's another one and that's seeing a nice boost today up on the back of this call as well. up next here are the airlines. it's been a tough trade. credit suisse providing target estimates lower across. a couple of the more dramatic cuts. spirit airlines trimmed by $25 down to $75 a year. united continental goes down to 69, down $29. >> and melissa, did you know that over the past month only two airline stocks are higher? i looked it up this morning. hawaiian airlines and sky west action two of the smaller players. >> wow. up next citigroup adding this to its focus list. their target 360. 17% upside. they say the organic growth profile is not reflected in current valuations. this is a company that owns the

right to botox. they like that and glaucoma and dry-eye treatment opportunities coming out. >> there's been some optimism about the irtritable bowel syndrome drug they have. that could be a $500 million a year drug for them. michael kors bouncing a bit after hitting a low. janney recommending investors accompanied kors in the near to medium term. there could be more contraction beyond the company's guide ans. fair value estimate $52 and that's 15% higher than yesterday's close. >> even that's low. the average target of the 30 analysts who cover the stock and why you need 30 to cover michael kors, i have no idea. the average target is $59.89. that's nearly 30% higher than the current price so analysts will have to start cutting wildly or up their game. now to today's under the radar game sorrento

therapeutics. a biotech. it begins with a buy and $17 target. they say they like the company for a cancer treatment opportunity as well as a very early, phase 1, phase 2, pain treatment related to cancer that could be a, quote, first in class compound. a couple of days ago, a big fund up in boston announced more than a 5% stake in this company. look at the 12-month chart on this one, up 164%. wow. >> i know. still slightly under $500 million but the stock has been red hot. you've got a lot of analysts covering it. all right, that wraps it up. up next another sign we may be going just a wee bit crazy in the housing market again. plus the ceo of the company that makes boston whaler and searay boats, brunswick corp on whether the economy really continues to improve. first, the oil close is up next when "power lunch" returns.

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if you want to succeed in business, mistakes are a luxury you can't afford. that's why i recommend fast reliable comcast business internet. they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business. he's your c nbc news update at this hour. iran's foreign minister meeting with his greek counterpart in athens, says he hopes a comprehensive nuclear agreement can be reached in a reasonable amount of time but he warned a deal would be hard to come by if the world powers stuck with what he called excessive demands.

the former outside auditor for bernie madoff's firm was sentenced to a year of home confinement after cooperating with authorities investigating madoff's ponzi scheme. he was also ordered to give 250 hours of community service. jpmorgan chase has begun layoffs that are expected to total 500,000 by next year according to dow jones. the move comes as the bank overhauls its nearly 6,000 branches to rely more on technology and less on human tellers. the fda has asked makers to update their labeling to reflect the risk of serious injuries. this from unintentional injection of fillers into the blood vessels in the face that could restrict or cause stroke. that's the cnbc news update for this hour. back to you. >> thank you very much. incredible new numbers from the oil patch today. yeah, drilling rigs jackie may be down but actual oil production is way up. what's going on? >> that's exactly right, brian. from one oil geek to another,

this really was a staggering report from the eia today. production in the u.s. rose last week to more than 9.5 million barrels. that is a record number. we haven't seen that in more than 40 years. it's also the highest weekly number that we've seen since the records have been kept. now, i do want to say this. yes, rigs have been going down but you and i have had this conversation. maybe not the most producing rigs have been coming offline. also you had opec out this morning. reuters citing a draft report of opec saying it expects non-opec countries to increase production until 2017. but what's interesting in the price action that we saw today was, yes, we were negative but we came off session lows. some traders explaining that away as we had a gasoline draw a crude inventory draw despite the fact that production was up this high. that may mean demand is shifting here so that's what you need to watch. back to you. >> all right, jackie d. thank you very much. i appreciate being called an oil geek. i take that as a compliment.

the past year we have talked about car sales, truck sales even motorcycle sales with polaris. let's get on board now with the most discretionary and arguably most fun consumer purchase of all, boats. brunswick makes pool tables and fitness equipment but boats may be their bread and butter. you've got whalers, lunds, crest liners, and now here is the ceo of brunswick. jackie talking about oil prices going down again. do you notice any direct uptick in any of your product lines when gas prices go down? >> no we've never been able to correlate new boat sales with low gas prices. >> amazing. we hear low gas will save every industry and every ceo i've had on has said the same thing. >> we do have a benefit but it's a little lagging. more people use their boats and that's driven very well by lower fuel prices. the more they need their boats fixed, and we have a very strong parts and accessories business that's a very high margin business, so that's the lagging

effect that we get from boat sales. >> second derivative effect. how are boat sales? >> they're great this year. year to date the industry is up 7%. we're actually up 12. took a full point of market share in the first quarter, which is very hard to do in this industry. and in our engine business, we've also taken a full point of share so we're having a great year. >> these are big yachts but you go down to 8.5 foot lake boats as well. up to millions of dollars. what part of the market is selling right now, and is there any part that's not, or struggling? >> let's do the struggling first so we can end on a high note. the struggling are the classic runabout that's the stern drive engine. 25 feet and under. it's not recovered since the recession. in fact it continues to go down. and i think what's really happening is the part of the industry that's doing really great right now, which is the pontoon industry is probably cannibalizing those runabout sales.

the pontoon industry is in its fourth year of double-digit growth. >> is that because of boomers? pontoon boats, we call them in the lake world a party barge. not real quick but they're flat and you can cocktail on them. >> that's the old pontoon. the new pontoon will have three logs. >> not actually logs. >> three aluminum logs on which the boat sits. they'll seat 16 or 18 people. you can teach people to ski. >> very quickly, analysts this morning said you've got to ask about japan because the yen is down. they're big competitors in the engine market, which is the biggest part of your revenue. >> yes. >> are you seeing cheaper japanese imports starting to cutaway at your market share? >> no really not at all. from time to time specials will be run but the japanese are using this time as the time to take margin. they're great competitors and i

think we're all doing very well in the marketplace. >> what's doing well is boat sales. dusty mccoy it's a real pleasure to have you on. happy boating. >> thank you. the nasdaq down a bit today but still off a record high. one stock that has been anything but a good bet, wynn resorts. in fact the worst performer in the nasdaq 100 over the past year. by the way, welcome to trading nation, everybody. harry curtis rich ross. harry, first to you. we know vegas has come back a bit. are you surprised by a stock that is down 53% in 12 months? >> when you think about the amount of decline in revenues which is about 45%, it's really no surprise. >> what do you attribute that to mostly? what's wynn resorts single most one or two problems? >> it's primarily the regime change in china, which has become much more anti-corruption

focused and the administration wants to make sure that the gaming revenues in macau are from clean sources. >> so what do they do then? if you're steve wynn or the board of wynn what's your answer? >> that was an interesting question on the last earnings call because they have $4.1 billion of new building coming out of the ground next year. and you can't stop that. so what you have to hope for is that they have the best -- the best engine in the boat to borrow from the last person and i think they will. but you're also -- you're also fishing for customers off of really the shallow end. these are lower end customers so you just simply need more of them. >> rich ross listen let's look at the charts on wynn because they're supposed to take in all the fundamental work and also the technical analysis too. on a technical basis is the overall picture a buy or a sell for wynn.

>> brian, i'll be clear here. the only chinese casino i would buy is the shanghai composite. wynn not so much. i'm a seller of the stock and i'll show you why. first we look at that daily chart, brian. there's absolutely nothing i like about this chart and that's difficult to say. you can see that gap down on the last earnings release. a gap down within the context of a bigger down trend is never a good thing. it's a disservice to the 100-day to even put it on the chart. we're not getting back to 133. when you look longer term you see that break below the 200-week moving average, brian. that tells us that the primary trend is now lower. the stock is going to test $95. it could get cut in half again. it could trade $50. keep in mind in 2009 this was a $14 stock. as harry mentioned, these anti-corruption measures are going in where fast. macau gdp down 24.5%. with a chart like this that's a

horrible combination. sell the stock right here if you own it. if you're flat, you can short it. >> we're watching of any and potentially 50 if 95 doesn't hold. harry, rich thank you both very much. for more trading nation head to our website, tradingnation.cnbc.com. melissa. sales of geno therapeutics down this year and it's been a bumpy ride in both directions. the company is involved in a promising but unproven new treatment for cancer. meg terrell is here to explain and tell you how to play it. >> that's right. they're part of this class of immune owe therapy drugs known at car-t. just remember car-t and you'll be good. last hour we took you into novartis' plant. you take a patient's t cells out of their body beef them up to better identify and fight cancer multiply them and then readminister them to the patient so it fights their tumor cells. there are a lot of companies working in this space. we looked at novartis earlier,

but also juno kite bellicum many companies have bigger biotech and pharma partners. you see them being very very volatile. the leaders in the space analysts say novartis juno and kite are all working on a very similar and small patient population, but this is very very early days. i spoke with the juno's ceo earlier today and he said they could be on the market with their first product in 2017. analysts say this is like the early days of cell phone technology. this will look very, very different in the next two or three years. the bigger opportunity is in more common cancers like solid tumors, lung breast other cancers like that. this weekend there will be a lot of discussion of these in particular. they are very, very volatile. no key binary moving data but they're always a topic of interest. >> we already have the data dump so we have an idea of what's coming out this weekend? >> it's true. there's no huge data for each of these companies, but they're top

of mind for a lot of people because it's such a hot topic. we should see this evolve over the next few years. but juno has coming out doing smaller deals, beefing up its technology. it's one of the smaller companies that's still unpartnered. they don't have a big pharma or biotech partner. they're going alone. hans bishop says this is what they want to do because they're 100% focused on this area. so very very interesting to see how different companies are competing here. >> meg terrell, thank you. >> up next the latest sign that certain parts of the housing market may have gotten a little stupid again. that story -- yeah that's a big number. we're back after this. and now, the latest from trading nation.cnbc.com and a word from our sponsor.

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house under construction in the bel-air neighborhood of l.a. will have an asking price of $500 million. you've got to put your pinkie to the side of your mouth when you say that. the house will be 74,000 square feet. it will have three smaller homes orbiting around it and a 30-car garage. also a, quote, monaco style casino. this is real. now, if it sells for anywhere near the asking price, it would easily be the most expensive home sale ever. these pictures by the way, are just renderings from the architectural firm mclean design. unbelievable numbers there. is this another sign that as we've said a few times lately or at least i have, housing is starting to get a little stupid again especially in parts of california. don peoples, jerry howard. don, you're a rich guy, you're a developer. your take on a $500 million house. >> look, they might as well ask

a billion dollars. at some point that just makes no sense at all. look, someone buying a $500 million house based on a percentage of a billionaire's net worth for a home that would mean they need to be worth somewhere around $10 billion to buy that house. the typical billionaire is spending about 5% of their net worth on all of their housing, let alone one single house. >> obviously, listen the intent is probably to get attention, don, and they're doing it. we're highlighting it on the show so we're as guilty as anybody. but when you look at the footprint of the house, it makes the mansions of bel-air actually look small. is this telling us a story about the very high end of the market or is this telling us a story about the entire housing market right now? >> well los angeles is fantasyland to begin with and this is another fantasy. look i have a good friend jeff green, who has his home in beverly hills on the market for just under $200 million and that actually makes some sense because if you look it's got almost 30 acres of land.

you've got a house that's actually livable and useable. and that's a tough house to sell. this one just makes no sense. here we are in an environment where there's this tremendous wealth divide in itself and i think that that -- next they're going to start beheading wealthy people if people start spending $500 million for a house like this. this is ridiculous. >> i agree with you, don, in terms of the ridiculous point. jerry, i want to go to you because i'm wondering if you think this can be extrapolated to tell us anything about the housing market. new york and san francisco are the strongest markets right now. but it's probably because the inventories are so low. >> that's exactly the reason that prices are going up. over the course of the past several years there's been very very minimal new home construction, so the inventories of new homes for sale are way, way down. likewise, a lot of people in existing homes are still reluctant to put their houses on the market. that's why prices are going up. but this $500 million house is a complete anomaly. personally, i'd like to see it

but i don't know of anybody that would buy it. >> so it's stupid jerry. >> i'm not going to say it's stupid. if somebody wants to spend that money on their house, that's up to them if they can afford it. >> don, you were saying? >> i would say, look that bears no resemblance to what's going on in the marketplace. right now in the major cities like new york san francisco, washington, d.c. and other places, there is a shortage of inventory. and in fact that's slowing the market down because many people don't want to sell their own homes until they can go into a new home. >> the only thing i would say, don, and i respect your views, i was up in boston last week. you walk down the street and look at real estate. two bedroom apartments in the back bay -- i wasn't looking to purchase, i was just looking. san francisco. some of these markets, it seems so hot but are we myopic? are we looking at these with east coast media bias? >> you're looking -- i'm sorry. >> i would tell you, brian, that if you look at where housing prices are today adjusted for

inflation from the last market cycle, they're still relatively reasonably priced. look, my wife gave me a little notebook that showed what went on and what the world was like in 1960 the year i was born. and the average home price in 1960 was $5,000. so let's think about that and where we are today. so i don't think that -- look we're developing in the back bay right now. and we're very optimistic. we think it's undervalued compared to other global cities. new york is getting close to being priced as a global city. but d.c. san francisco, boston miami are underpriced globally. >> jerry, your last point of view? talk to our non-l.a. boston and new york viewers are probably annoyed right now. how's the rest of the country? >> the rest of the country housing is very affordable and with interest rates being what they are it's still a great time to buy. those markets that you were talking about, and i think don would agree with me are also some of the markets that have the most restrictive building requirements in the country as well, which also drives up the

cost expeditiously. >> all right, don and jerry, great discussion. thank you, guys. >> thank you. coming up we will talk to the 17-year-old whiz kid who won 75 grand who won $75,000 for his invention that could help you breathe a little bit easier. and tastes are changing. we'll tell you what rich people are driving when "power lunch" returns. the network that monitors her health. the secure cloud services that store her genetic data the servers and software on a mission to find the perfect match. and the mom who gets to hear her daughter's heart beat once again.

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fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. the super rich are no longer just driving sports cars. now they want luxury suvs. even lamborghini is making one now. phil lebeau has more. >> super luxury suvs are all priced at least above $75,000. lamborghini is the latest to get into the race. yesterday the company confirms it will be building the rambo lambo. it was a concept we saw in china three years ago. it was the first suv from lamb

lamborghini in recent times. this will go on sale in 2018. no price yet but whether it comes to market you can bet there will be plenty of buyers. the demand for suvs this year priced over $75,000, sales up 44% according to true car. all suvs are up only 20%. if you think maybe it is all vehicles over $75,000 -- no. cars over $75,000 up 13%. the next luxury suv that people are going to be looking for -- the tesla model x. this is going to roll out at the end of this summer. no pricing yet but tesla has said it will be close to what we see for the model s and the average model s sells for $93,000. make no mistake, they are clearly targeting the luxury market with the model x. shares of tesla, back over $250 a share. back to you. >> phil thank you. up next potential game changer in the sky? a 17-year-old genius $75,000. all in the same story. that's true.

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you got this. welcome back. hoping to get our 17-year-old genius either on camera or by phone. little technical issue there. if raymond wang is able to join us -- that's him right there designing a new air intake system that will help you breathe easier and cleaner on airplanes because we all know how we feel when we get off a plane. dry mouth, a little dizzy.

that could be from the whiskey. either way, raymond wang developing something really cool. also winning a $75,000 prize. he's havefrom vancouver, british columbia. i don't know about you melissa, to see these kids and what they're doing, they are so far above where i was at there age. >> the intel science and engineering fair. what he did, numbers are staggering. it improved the availability of fresh air in the cabin by more than 190%. while reducing pathogen inhalation concentrations by up to 55 times. this could potentially really change the way we travel and the way we feel after we travel. he came up with the idea after hearing about the ebola outbreak in africa. obviously that was when there was a lot of concerns about ebola traveling because of air travel and so -- >> trying to do some good. i didn't get to fly a lot as a kid. we didn't have a lot of money, but i do remember the first flight i took innate grade we

flew to washington, d.c. to los angeles for like a teen government week or something. and i just remember being on the plane and we were the last row right in front of the smoking section. does anybody remember smoking sections on planes? >> that's crazy. >> literally people right behind you. it's -- you're in 36 and i'm in 35. it was -- where was ray wang then is my point? >> good for him. congratulations, raymond, for $75,000. hope you put it to good use. like maybe college other something like that. >> or six or seven first class trips for his cities around the world breathing easier. he's a smart guy, he'll make the money back. >> we're done stalling. the dow jones industrial average down to 18,122. what's coming up on "fast money"? >> check out shares of biomarin. the question does the company have a drug in the pipeline that could propel it even higher? the answer tonight at 5:00 on

"fast." >> biotech still doing very well. we look forward to that at 5:00 p.m. eastern. folks, thank you for watching closing bell -- >> closing bell's next. yes, thanks everybody for watching "closing bell." i'm kelly evans here at the new york stock exchange. >> i'm bill griffeth. welcome to the most important hour of the trading day. we say that all the time. it is not just because we think it because it is our show. there's a new study out. you're going to find this very interesting. you'll find out why many on wall street say the last 30 minutes of tradesing ingtrading are indeed so critical to the trading day. goproup 7% as the company reveals its plan to get into virt oolual reality and drones. we have someone who says this